Shortcut Navigation:

Question for the Money Doctors

Question submitted on Mar 30, 2022.

Question

If I am quit claim deeded a property from my grandparents estate/trust will there be any tax implications?

Answer

Transferring your grandparent's property to yourself via a quit claim deed is a gift.    You will need to get an appraisal of this property to figure out the value of the gift.   You will take over their cost basis in the property.  This means the cost basis is equal to what they paid for the property plus any improvements.   There is no INCOME tax consequence to you or your grandparents.

However, your grandparents will have a GIFT tax consequence.  No gift tax will be due, but a Gift Tax Return will need to be filed on Form 709.   Please consult a knowledgeable tax advisor to help you with this.  The Gift tax rules can be complicated.

Also, it may be better to inherit the property upon their death because you can benefit from the step up in basis which could help reduce the capital gains tax if you plan on selling the property.

Please consult with a knowledgeable tax advisor to review this analysis with you.

Here is a link to Form 709:

https://www.irs.gov/pub/irs-pdf/f709.pdf

Here is a link to the instructions:

https://www.irs.gov/instructions/i709


For additional information visit //www.360financialliteracy.org/

close